Hathurani v Jassat

An interim payment is available only where the claim is capable of producing a monetary judgment and the payment sought is on account of that liability. Claims for dissolution of a partnership or declaration of a trust do not ordinarily satisfy that requirement merely because a later accounting may result in payment. The applicant must also show, with a high degree of certainty, that a substantial monetary judgment will be obtained. Interim payment applications are unsuitable for fact-sensitive disputes involving difficult questions of law. A resulting-trust presumption has no application where the parties expressly arranged the transfer or agreed a loan. An alternative argument concerning foreign illegality could not overcome the uncertainty surrounding the applicable law and facts.

Mr Hathurani sought an interim payment of £7.2 million from Mr Jassat. The claim arose from money taken from Swiss accounts and used in transactions involving English property and businesses. Mr Hathurani advanced partnership, joint venture, trust, damages and loan analyses. Mr Jassat relied on a loan analysis and contended that the transactions were unenforceable because they involved breaches of South African exchange-control law.

The central issues were whether the claims fell within the interim-payment jurisdiction and whether Mr Hathurani was certain to obtain judgment for a substantial monetary sum, including in light of choice-of-law and illegality issues.

1. Application dismissed. Under CPR 25.1 and 25.7, an interim payment must be on account of damages, a debt or another sum for which the defendant may be liable. The applicant must establish that a substantial monetary judgment will be obtained.
2. The partnership and trust claims were not presently claims of the necessary kind. They might result in dissolution, vesting or declarations concerning property, followed by a later accounting or sale. They did not necessarily impose a personal liability on Mr Jassat to pay money. The damages or equitable-compensation claim was potentially within the rules, but it was neither pleaded nor evidenced as a claim for at least £7.2 million.
3. The loan analysis did not cure the difficulty. The question whether Mr Hathurani would recover on that basis depended on disputed and incomplete facts, choice of law and South African illegality. The required satisfaction under CPR 25.7 involved a high degree of certainty. Such an interlocutory application was unsuitable for resolving complicated facts or difficult legal questions. The applicable law was also fact-sensitive. The court could not determine with sufficient clarity either the implied choice of law or the closest connection under the Rome Convention provisions.
4. The resulting-trust argument provided no alternative route. The presumption arises where money is transferred in circumstances that do not suggest a transfer of the beneficial interest. It has no room to operate where the parties expressly arranged the transaction, including by way of loan.
5. On the assumed facts, an English-law illegality argument would have required the contract to require the commission of an illegal act in the friendly foreign state. The fact that the act happened to occur in South Africa was insufficient. That point was alternative and did not determine the application.

Directions were given to progress the action to trial as soon as reasonably practicable.